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Labor 'immersed' in slush fund culture

The federal opposition says revelations surrounding a current Australian Workers Union (AWU) slush fund proves the ALP is "fully immersed" in a morally unacceptable culture.

AWU Victorian secretary Cesar Melhem told Fairfax Media that a non-profit company he runs has raised $500,000 since 2008 to help fund election campaigns in other trade unions.

Julia Gillard, then deputy prime minister, was a guest speaker at the first fund-raising lunch for Industry 2020 in August 2008.

"What this shows is that the Labor party are fully immersed in this culture of slush funds," opposition workplace relations spokesman Eric Abetz told reporters in Melbourne on Wednesday.

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"That is why they are so paralysed in dealing with the HSU (Health Services Union) scandal and the (1990s) AWU scandal - because they basically know that everybody's into it and they're all into it together."

Senator Abetz said it was "unbelievable" that some of the current AWU slush fund was used to finance an HSU election campaign in 2009.

While such behaviour might be technically legal it was morally wrong, he said.

"For the deputy prime minister of the time to be so associated with such an inappropriate fund is completely unacceptable," Senator Abetz said.

He said the prime minister had "a lot to answer for" even though Mr Melhem had stressed Ms Gillard didn't know how the funds raised would be spent.

Union bosses should have to fully disclose to their members "everything they do", he said.

As a lawyer in the 1990s Ms Gillard provided free legal advice to two AWU officials who were seeking to register an association.

The opposition says the prime minister gave a false statement to the West Australian corporate affairs commissioner when she knew it was a re-election vehicle.